All Forum Posts by: Toby Johnston

I have good income and great credit. My potential partner has cash but bad credit due to a recent short sale. We want to purchase an apartment building together. The property will be professionally managed. How can we structure the deal so that it is fair to both of us?

Andrew, I didn't know you were on BP but good to see you here.  Send me a PM so we can connect for lunch sometime.  Courtney and I have been discussing a potential flip as well even though I'm more of a buy and hold guy myself.  As to this discussion, your tax rate may be too low if you end up holding for less than 12 months and don't get long-term gain treatment.  You would also want to make sure that your activity qualifies as an investment and not as "business income" which is often the case with regular flippers.

I am an out of state investor and recently purchased a single family home in Gilbert, AZ.  I'm in the beginning stages of working with a property manager at PRS Property Management but so far they are not very responsive to my needs.  They've had the keys for 9 days, the property is basically brand new move in ready, but they don't even have it listed yet.

So who do you recommend I work with to manage my property assuming PRS doesn't make a swift recovery?  Are my suspicions about PRS merited?

Thanks

Thanks.  That is sound advice.

Has anyone had experience buying a builder model home with a leaseback provision?  What was your experience like?  Would you do it again?  Pros and cons?  I realize the numbers need to make sense first but just looking for some general advice here.

Interesting discussion on cash flow versus appreciation. Personally I don't believe there is one right answer, just different strategies for different markets/investors and different levels of risk. As we all know, markets are cyclical. I'm selling my rental property for an all time high and benefiting from appreciation. Now I feel more comfortable going after some cash flow, meaning investments that will self maintain and provide a little extra which I can reinvest in other properties. I realize this is likely not a home run strategy but I am ok with that. I've been advising clients on taxes here in Silicon Valley for the past 15 years and right now it feels like the tech stocks are getting a little bubbly. I personally believe that is what drives the Bay Area economy to new highs. So I took some risk off the table. Still have my primary residence and will keep that either forever or at least until I have a $500k tax free gain.

How about Reno? Obviously smaller market but I can drive there in less than 5 hours. Numbers look pretty good. Not nearly as good as two years ago but still good.

I don't want to rely solely on appreciation for my return on investment so I'm looking for cash flow with average appreciation. Those numbers don't work in San Jose any more.

It was a primary residence before rental so the gain is tax free (no 1031 necessary). For me the amount is substantial but I'd rather not say exactly. Enough for down payments on several properties outside the Bay Area.

Thanks for the advice.